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out that the methods pursued by Russia to acquire
financial power in Persia were identical with those so success-
fully employed in China. The Russian Bank is a branch
of the Russian Ministry of Finance, and is used as a
political instrument. Its operations are not conducted on
business lines. Consequently the annual deficit must be
great, not only from losses due to its operations, but also
from the extravagant scale of its buildings and the huge
salaries paid to its managers. However, by lending large
sums on real estate and by other methods the financial
grip of Russia has been riveted on Persia ; and the results
are held to justify the expenditure of a few million
Persian Loans.—The raising of a Persian Government
loan was attempted first in England; but just then the
Tobacco Monopoly and the Persian Bank Mining Rights
Corporation, had given Persia a bad name on the London
Stock Exchange ; and it was evident that without the
strong support of the British Government money would
not be forthcoming. The security offered, namely, the
Customs of Southern Persia, was ample. But immediate
control by the British capitalists was insisted upon, instead
of eventual control in case of default; and ostensibly on
this rock the loan foundered.
This gave Russia an opening of exceptional promise.
In 1900 she agreed to lend Persia £2,400,000 at 5 per
cent, with a sinking fund. The security was the Persian
Customs exclusive of the Gulf ports. One condition was
that the Persian Government should repay the balance of
a loan of half a million contracted with the Imperial Bank
of Persia to provide compensation for the Tobacco
Monopoly ; and all other loans were simultaneously to be
discharged. Furthermore, it was stipulated that for a
period of ten years no new loans should be contracted by
Persia from any foreign power ; and also that without the
consent of Russia Customs dues should not be lowered.
The loan was issued nominally at 86f with a commission
of if per cent. Consequently, when the sum due on
account of the Tobacco Monopoly and the other bank
debts had been paid off, little more than one million
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